close it down
Yesterday’s Senate Banking hearing brought together leaders of the traditional financial system of the United States for an annual oversight hearing (video). Senators took the opportunity to ride various hobby horses of the moment. Senator Elizabeth Warren (D, MA) used her 5-minute Q&A to promote her Digital Asset Anti-Money Laundering legislation [S.2669] while questioning JP Morgan CEO Jamie Dimon, a well-known critic of all things crypto.
Dimon may hate on crypto, but his bank is full-steam ahead on using blockchain rails for his own projects such as JPM Coin.
The Warren Q&A included the following:
Senator Warren: “Today’s terrorists have a new way to get around Bank Secrecy Act: cryptocurrency. Last year, an estimated $20 billion in illicit crypto transactions funded every kind of dangerous criminal. North Korea has funded at least half its missile program, including nuclear weapons, using the proceeds of crypto crime. And Israeli officials have confirmed that Hamas received millions of dollars through crypto transactions including ‘large sums from Iran.’ Mr. Dimon, you’ve been CEO of JP Morgan for almost two decades. Can you explain why crypto is such an attractive financial tool for terrorists, drug traffickers and rogue nations?”
Mr. Dimon: I’ve always been deeply opposed to crypto, Bitcoin, etc. You pointed out that the only true use case for it is criminals, drug traffickers, anti-money laundering, tax avoidance -and that is a huge case because it is somewhat anonymous, not fully, and because you can move money instantaneously, and because it doesn’t go through, as you mentioned, all these systems that have built up over many years: Know-Your-Customer (KYC) sanctions, OFAC. They can bypass all of that. If I was the governments, I’d close it down.“
NDAA amendment out
Politico Defense beat reporter Jordain Carney announced late last night on X the arrival of the final “conference report” version of the National Defense Authorization Act (NDAA).
Crypto asset anti-money laundering (AML) provisions originally proposed in the NDAA – S.Amdt.712 – by Senators Cynthia Lummis (R, WY), Kirsten Gillibrand (D, NY), Elizabeth Warren (D, MA) and Roger Marshall (R, KS) did not make the bill’s final version.
See “Crypto asset anti-money laundering examination standards” and “Combating anonymous crypto asset transactions” in the final 3,093-page report here (PDF). (h/t @CodyCarboneDC)
what you should know: This amendment – announced in July – was positioned as a compromise between the pro- and anti-crypto camps in the Senate and merged select elements of the Lummis-Gillibrand Responsible Financial Innovation Act [S.2281] and Warren-Marshall Digital Asset Anti-Money Laundering Act [S.2669]. Though the Senate is now back where it started in the crypto/AML discussion, it at least showed some room for agreement between the two sides. The Republican-controlled House and the House Financial Services Committee, in particular, never really voiced interest in the amendment.
blockchain bills – Day 2
After Tuesday’s unanimous vote in support of passage of ” “H.R. ___, Deploying American Blockchains Act,” yesterday’s Energy & Commerce markup included a vote on another blockchain bill known as “H.R. 4814, Consumer Safety Technology Act” and featuring bipartisan sponsorship from Reps. Darren Soto (D, FL), Michael Burgess (R, TX), Lori Trahan (D, MA), and Brett Guthrie (R, KY).
The bill passed by unanimous 45-0. This bill’s purpose centers around a study: “Not later than 1 year after the date of the enactment of this Act, the Secretary of Commerce, in consultation with the Federal Trade Commission and any other Federal agency the Secretary determines appropriate, shall complete a study on current and potential use of blockchain technology in commerce and the potential benefits of blockchain technology for limiting fraud and other unfair or deceptive acts or practices.”
Worldcoin
The Sam Altman-backed crypto project Worldcoin announces plans for decentralization as it expands its eye-scanning ambitions – Fortune (on Yahoo)
new co-sponsors
Senator John Hickenlooper (D, CO) signed on a co-sponsor of Senator Elizabeth Warren’s (D, MA) “Digital Asset Anti-Money Laundering Act” [S.2669]. There are now 17 co-sponsors according to Congress.gov.
Rep. John Curtis (R, UT) signed on as a co-sponsor of House Agriculture Chair Glenn Thompson’s (R, PA) “Financial Innovation and Technology for the 21st Century Act” [H.R.4763]. There are now 8 co-sponsors according to Congress.gov.
what you should know: Given Sen. Hickenlooper’s past criticism of the SEC regarding crypto regulation as well as his co-sponsorship of the PROOF Act with Sen. Thom Tillis (R, NC), the Colorado senator might have been viewed as sympathetic to digital assets interests. His support of Sen. Warren’s bill may say otherwise.
debating crypto
Crypto Gets Mentions at Last Night’s Republican Presidential Debate – CoinDesk
market structure reminder
At yesterday’s Member Day hearing, House Agriculture Chair Glenn “GT” Thompson (R, PA) began with an opening statement which reminded all participants that the digital assets market structure bill, which passed out of markup in July, is still a priority. Thompson said, “Over the past year, we worked closely with the House Committee on Financial Services to craft the Financial Innovation and Technology for the 21st Century Act, or FIT21, a comprehensive framework for the digital asset market. FIT21 will offer certainty for market participants, address regulatory gaps, foster American innovation, and implement vital customer protections in the digital asset ecosystem. This collaborative effort resulted in FIT21 being passed out of both Committees in a bipartisan manner. Our work continues on this important policy priority as we pursue the bill’s advancement in the House.” Read the full statement.
still more tips
why blockchains matter, for everyone – a16z crypto
Founder and Majority Owner of Cryptocurrency Exchange Pleads Guilty to Unlicensed Money Transmitting – Justice.gov
Blockchain Association CEO Kristin Smith in regards to Chairman Patrick McHenry’s announcement he will not seek reelection – Blockchain Association on X
US crypto industry lobby spending on track for new record in 2023 – Reuters
More ‘Too Good to Be True’ Crypto Shenanigans in Hong Kong – The Wall Street Journal